You can hear the cries of panic and despair. Government must do something to avert an economic crisis. It must rescue Wall Street. It can’t let the banking system go belly-up. It must save capitalism from itself—even if it takes an injection of a trillion dollars or more. Oh beloved representatives of government—great masters of finance—have mercy on our pocketbooks and standard of living.

What many people fail to realize is that government, with the help of the Federal Reserve System, created the crisis in the first place. Asking them to solve the crisis is the same as asking the fox to guard the hen house and the hens’ eggs—to make sure the fox doesn’t steal any more eggs or eat any more hens.

Government and the Federal Reserve System

We can trace the destruction of our economic system back to the year 1913. That is the year our economic system received a double whammy—the year both the Federal Reserve System and the Federal Income Tax were foisted on the American citizens.

Did you know that on May 20, 1895 the Supreme Court declared a Federal Income Tax unconstitutional? Of course liberty violators never give up their efforts to plunder productive citizens. In February of 1913 the Federal Income Tax was ratified. It levied a 1% tax on all incomes over $3000—and a progressive surtax on all incomes over $20,000. Interventionists, do-gooders and altruists praised it. In fact, along with the Federal Reserve System, it was the first step toward a complete confiscation of private property—a liberty violator’s dreams come true.

The Federal Reserve System allowed government spending to soar to the stratosphere. It also allowed them to create artificial booms—the artificial booms that always result in busts. It "accomplishes" this by increasing the money supply through the means of artificially lowering the rate of interest. Like a ship crossing treacherous waters without a compass—individuals attempt to make correct entrepreneurial and investment decisions without the compass of a correct interest rate.

Interest rate manipulation reduces entrepreneurs and investors to stumbling around— hampered by the blinders they are forced to wear. Incredibly, some believe that the blinders assist them in anticipating future market changes more accurately.

In his book "Theory of Money and Credit" Ludwig von Mises identified how central banks create phony money by distorting interest rates—artificially lowering them. Tragically this deceptive maneuver tricks entrepreneurs into moving capital into uneconomic investments—what Mises called malinvestments. What continues to fool them is that they prosper in the short-term. Business picks up, workers are hired, the capital goods industry booms, overall prices rise, etc. Unfortunately—unfortunately for them—their projects prove to be unprofitable in the long run resulting in business failure, unemployment of the workforce and general economic malaise. The event everyone fears arrives—a bust resulting in recession and possibly economic depression.

In Gary North’s informative online newsletter "Reality Check" he mentions that: "We are living in a time in which the fundamental religion of our era has been faith in the redemptive power of the State. Whenever there is a crisis, citizens call upon the State to bail them out."

Well, on Friday October 3, 2008 Congress passed the Great Bailout Bill—hold on—they are now referring to it as the Great Rescue Bill—sort of reminds you of the doublespeak in George Orwell’s book "1984." Slavery is freedom. Falsehood is truth. Bankruptcy is prosperity. I’m sure you get the idea. When President Bush signed this suicidal piece of legislation, he guaranteed the eventual unraveling of our economic system.

The Hell with the Future – We Want It Now

Praxeology conclusively proves that all government intervention with voluntary exchanges will fail miserably—considerably worsening the situation. Have you ever wondered why people support social policies—that are not only ill advised—but also destructive to their long-term well-being? You might think: Doesn’t it occur to these people that they are consuming the seed corn of economic progress? I hate to inform you of this, but the sad fact is that most people have a short-term mentality. Now I admit that it is human nature to prefer now to later. However to totally disregard the intermediate and long-term consequences of your actions is extremely short-sighted—and it is definitely irrationally selfish behavior.

Look around—what do you see? With eyes wide open, you realize that you are witnessing a society that is hooked on excessive consumption of goods and services. Why save for the future when we can have it now?

We have devolved into an immediate gratification nation. In a recent article about the bailout by Robert Ringer, he compares the so-called happiness people receive from immediate stimulation to the "somas" Aldous Huxley’s characters received in the classic book "Brave New World." For more information on this I highly recommend you read Robert Ringer’s online article "The Great Bailout Stall – Part 2."—part of his "Voice of Sanity" collection.

Hail! Hail! Unhampered Capitalism

One of the legendary pioneers of Rock ‘n’ Roll Chuck Berry wrote and sang the song "School Days." In a famous, exciting verse he sings "Hail, Hail rock and roll. Deliver me from days of old. Long live rock and roll." My sentiments exactly.

I say "Hail! Hail! unhampered capitalism." You know, it was capitalism that delivered the masses from the days of old—from poverty and destitution—and filled their horn of plenty with goods and services that were previously unheard of. Unfortunately we have never experienced the marvels of unhampered capitalism. Governments and special interests have been sabotaging it from the start with destructive schemes of government interventionism and anti-life systems of socialism.

Praxeology (economics) proves beyond a reasonable doubt that unhampered capitalism is the only social system that can supply men and women with the goods and services they require for their existence. All other social systems thwart the effort of the individual to provide for the requirements of his life. Apparently, supporters of socialism and government interventionism need to retake their "School Days." It’s obvious they flunked their "Economics 101" course. They also failed all of their "Logic" courses.

If men and women desire wealth, abundance and prosperity. If they long for a world of peace and harmony. If they want what’s best for their children and their children’s children—they will wholeheartedly support the system of unhampered capitalism. Join me in joyously shouting to the world "Hail! Hail! unhampered capitalism. Long live unhampered capitalism."

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